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Catching Rogue Businesses That Fail to Insure Workers

Its something all New York businesses should know: workers’ compensation insurance is required by law. That’s right, New York State law requires that employers provide workers’ compensation benefits by purchasing insurance or by self-insuring. These no-fault benefits are determined by a state formula, and are intended to ensure that an injured worker receives payments for medical care and to replace lost income, as well as time off for medical reasons related to the injury. Doesn’t sound too hard, does it?

However the latest news from the New York State Workers' Compensation Board is truly stunning: 1,000 stop work orders have been issued to New York businesses for their failure to carry workers’ compensation insurance. It is mind-boggling how many employers think they can get away with failing to insure the workers they employ. What’s also surprising is that the Board has only had the power to issue these stop work orders since a 2007 reform effort was put forth in an attempt to protect the state’s working men and women.

The following actions were also taken by the Compensation Board:

  • Increase the penalty for failing to maintain insurance coverage to $2,000 for every 10 days out of compliance, up from the $1,000 set in the 2007 Workers' Compensation Reform Act (note, before the Act the noncompliance penalty was a mere $250 for every 10 days).
  • A total of $7 million in penalties were levied against New York businesses.
  • Of this total, $5.49 million in penalties to businesses that did not have the mandatory insurance protection for injured workers.
  • Of the total, $1.57 million in penalties for failing to produce business records that show, for example, number of employees, wages paid, and classification of employees.
  • Any penalties collected are placed in the Uninsured Employers Fund (a fund that pays the claims of injured workers whose employers do not carry the required insurance and is currently operating in a surplus).

The Compensation Board is able to do its work because insurance carriers must advise the board after every workers' compensation policy is written or canceled, and this data is captured in an easily searchable database. This allows the Board to identify companies that come into compliance by purchasing the required insurance, and to identify companies that fall out of compliance when they cancel or allow a policy to lapse. By cooperating with insurance carriers, the Board has ensured that businesses that don't carry insurance are readily identified and held accountable.

Employers who fail to carry workers’ compensation insurance deserve to be punished to the fullest extent of the law for their failure to protect their employees’ rights. What can we expect from a business that does not even value the very people who keep its doors open and the money coming in? If you have a New York workers’ compensation claim that you’d like help with, please contact the law offices of Markhoff & Mittman. Our attorneys can help you receive the assistance that you need.

Markhoff & Mittman, P.C.

14 Mamaroneck Avenue

Suite 400

White Plains, NY 10601

Toll Free: (866) 205-2415

Phone: (914) 946-1452

Fax: (914) 946-0810


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